Bank of Nova Scotia (NYSE:BNS) & Credicorp (NYSE:BAP) Financial Survey

Credicorp (NYSE:BAP) and Bank of Nova Scotia (NYSE:BNS) are both large-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, dividends, analyst recommendations, valuation and risk.

Risk & Volatility

Credicorp has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500. Comparatively, Bank of Nova Scotia has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500.

Profitability

This table compares Credicorp and Bank of Nova Scotia’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Credicorp	23.22%	17.94%	2.48%
Bank of Nova Scotia	9.74%	11.61%	0.62%

Dividends

Credicorp pays an annual dividend of $11.01 per share and has a dividend yield of 4.3%. Bank of Nova Scotia pays an annual dividend of $3.16 per share and has a dividend yield of 4.6%. Credicorp pays out 49.6% of its earnings in the form of a dividend. Bank of Nova Scotia pays out 84.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Credicorp has raised its dividend for 3 consecutive years and Bank of Nova Scotia has raised its dividend for 14 consecutive years. Bank of Nova Scotia is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Credicorp and Bank of Nova Scotia”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Credicorp	$23.34 billion	0.88	$1.47 billion	$22.19	11.59
Bank of Nova Scotia	$36.00 billion	2.38	$5.70 billion	$3.72	18.65

Bank of Nova Scotia has higher revenue and earnings than Credicorp. Credicorp is trading at a lower price-to-earnings ratio than Bank of Nova Scotia, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for Credicorp and Bank of Nova Scotia, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Credicorp	0	4	4	1	2.67
Bank of Nova Scotia	0	4	2	0	2.33

Credicorp currently has a consensus target price of $265.17, indicating a potential upside of 3.09%. Bank of Nova Scotia has a consensus target price of $86.00, indicating a potential upside of 23.98%. Given Bank of Nova Scotia’s higher possible upside, analysts clearly believe Bank of Nova Scotia is more favorable than Credicorp.

Insider and Institutional Ownership

89.8% of Credicorp shares are held by institutional investors. Comparatively, 49.1% of Bank of Nova Scotia shares are held by institutional investors. 15.9% of Credicorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Credicorp beats Bank of Nova Scotia on 10 of the 18 factors compared between the two stocks.

About Credicorp

Credicorp Ltd. provides various financial, insurance, and health services and products primarily in Peru and internationally. It operates through Universal Banking, Insurance and Pensions, Microfinance, and Investment Banking and Equity Management segments. The Universal Banking segment grants various credits and financial instruments to individuals and legal entities; and various deposits and current accounts. The Insurance and Pensions segment issues insurance policies to cover losses in commercial property, transport, marine vessels, automobiles, life, health, and pensions; and management services for private pension funds. The Microfinance segment provides management of loans, deposits, and current accounts for small and microenterprises. The Investment Banking and Equity Management segment is involved in provision of brokerage and investment management services for corporations, institutional investors, governments, and foundations; structuring and placement of issues in the primary market; execution and negotiation of transactions in the secondary market; and structuring of securitization processes for corporate customers and manages mutual funds. The company was founded in 1889 and is headquartered in Lima, Peru.

About Bank of Nova Scotia

The Bank of Nova Scotia provides various banking products and services in Canada, the United States, Mexico, Peru, Chile, Colombia, the Caribbean and Central America, and internationally. It operates through Canadian Banking, International Banking, Global Wealth Management, and Global Banking and Markets segments. The company offers financial advice and solutions, and banking products, including debit and credit cards, chequing and saving accounts, investments, mortgages, loans, and insurance to individuals; and retail automotive financing solutions. It also provides business banking solutions comprising lending, deposit, cash management, and trade finance solutions to small, medium, and large businesses. In addition, it provides wealth management advice and solutions, including online brokerage, mobile investment, full-service brokerage, trust, private banking, and private investment counsel services; and retail mutual funds, exchange traded funds, liquid alternatives, and institutional funds. The Bank of Nova Scotia was founded in 1832 and is headquartered in Toronto, Canada.